This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

4 Lessons From Allen Iverson's Money Meltdown

NEW YORK ( TheStreet) -- As a basketball player, Allen Iverson was a phenomenon.

First at Georgetown University, where he played for coaching legend John Thompson, then in the National Basketball Association, where he starred for the Philadelphia 76ers, Iverson was a hoops magician.

A Sixer's game was a must-see event when Iverson was in his heyday, and fans reveled in his speed, poise, charisma and ability to knock down the game-winning shot again and again.

He was paid handsomely for his efforts. Iverson earned $154 million in his 14-year NBA career, according to Sports Illustrated.

Yet today, Iverson is broke, and heavily in debt -- for now. The former all-star made news this week as his $4.5 million Atlanta mansion was set to fall into foreclosure after he defaulted on the mortgage.

What happened to Iverson, and what lessons can Americans take from his financial fall from grace? There are many, but here are some of the most important ones:

Don't live beyond your means: Financial advisers are in unison on one kitchen-table financial topic -- you can't spend more than you earn. But that's what Iverson did. According to papers filed in a recent lawsuit, and published by Iverson earns approximately $60,000 per month, yet spends about $350,000 per month. The legal report says Iverson spends about $10,000 per month on food and clothing; $10,000 on restaurants and entertainment; and $1,000 on dry-cleaning bills.

Don't take your eye off the ball: Funny to say this about a basketball legend, but Iverson regularly avoided the financial basics and "took his eyes off the ball." He habitually splurged on purchases he didn't really need and wound up paying the price. For example, Iverson's bank account was seized last year after he couldn't pay more than $860,000 he owed to a jewelry store.

Don't lose control of your finances: On the personal financial front, Iverson was his own worst enemy. In his recent foreclosure case, he claimed he never agreed to the mortgage loan for the Atlanta mansion -- that his wife actually signed the loan papers. In Kitchen Table Economics 101, you always know where your money is and where it is going. Iverson failed that test, and spectacularly so.

Get professional financial help: One smart move Iverson did make was to hire a financial adviser, who may just save the day for the former superstar. The New York Post reports that a financial adviser parked some of Iverson's assets in an investment portfolio that Iverson could not touch until age 55. The Post said in March that the portfolio is estimated to be worth $32 million.

Iverson's financial mishaps don't make him a bad person. But the lessons learned from the former NBA great paint a picture of a squandered financial fortune, thanks to some basic money management mistakes.

Those are lessons worth learning no matter how much money you have in the bank.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs